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Organisation for Economic Co-operation and Development 2003Organisation de Coopération et de Développement Economiques

COM/ENV/EPOC/DCD/DAC(2003)1/FINAL

ENVIRONMENT DIRECTORATEDEVELOPMENT CO-OPERATION DIRECTORATE

Working Party on Global and Structural PoliciesWorking Party on Development Co-operation and Environment

DEVELOPMENT AND CLIMATE CHANGEIN NEPAL:

FOCUS ON WATER RESOURCES ANDHYDROPOWER

by

Shardul Agrawala, Vivian Raksakulthai, Maarten van Aalst,Peter Larsen, Joel Smith and John Reynolds

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Copyright OECD, 2003

Application for permission to reproduce or translate all or part of this material should be addressed tothe Head of Publications Service, OECD, 2 rue André Pascal, 75775 Paris, Cedex 16, France.

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FOREWORD

This document is an output from the OECD Development and Climate Change project, an activity jointly overseen by the EPOC Working Party on Global and Structural Policies (WPGSP), and the DACNetwork on Environment and Development Co-operation (ENVIRONET). The overall objective of theproject is to provide guidance on how to mainstream responses to climate change within economicdevelopment planning and assistance policies, with natural resource management as an overarching theme.Insights from the work are expected to have implications for the development assistance community inOECD countries, and national and regional planners in developing countries.

This document has been authored by Shardul Agrawala. It draws upon three primary consultant inputscommissioned for this project: “Nepal’s Hydropower Sector: Climate Change, GLOFs and Adaptation” bythe Asian Disaster Preparedness Center (ADPC), Bangkok, Thailand (Vivian Raksakulthai); “Review of

Development Plans, Strategies, Assistance Portfolios, and Select Projects Potentially Relevant to ClimateChange in Nepal” by Maarten van Aalst of Utrecht University, The Netherlands; and “Analysis of GCMscenarios and Ranking of Principal Climate Impacts and Vulnerabilities in Nepal” by Stratus Consulting,Boulder, USA (Peter Larsen and Joel Smith). Valuable insights were also provided by experts, governmentofficials, donor and NGO representatives at a consultative workshop organized in connection with thisproject in Kathmandu on March 5-6, 2003 by the Department of Hydrology and Meteorology of HisMajesty’s Government of Nepal and the Asian Disaster Preparedness Center (ADPC). An additionalcontribution was solicited from John Reynolds of Reynolds GeoSciences, UK.

In addition to delegates from WPGSP and ENVIRONET, comments from Tom Jones, Jan Corfee-Morlot, Georg Caspary, and Remy Paris of the OECD Secretariat are gratefully acknowledged. Editorialinputs on an early draft were provided by Nipun Vats (Princeton University), and Martin Berg provided

project assistance. ADPC would like to acknowledge the help and expertise provided by AdarshaProkherel, Madan Lall Shreshtha, Arun Shreshtha, and other staff of the Department of Hydrology andMeteorology; John Reynolds of Reynolds GeoSciences; Sredhar Devkota and Ajoy Karki of the GTZSmall Hydropower Project; Tony Carvalho of USAID’s hydropower program; Tek Gurung of UNDP; andKrish Krishnan at International Resources Group. The Secretariat and Maarten van Aalst would like toacknowledge several members of the OECD DAC who provided valuable materials on country strategiesas well as specific projects. Stratus Consulting would like to acknowledge inputs from Tom Wigley at theNational Center for Atmospheric Research (NCAR).

This document does not necessarily represent the views of either the OECD or its Member countries.It is published under the responsibility of the Secretary General.

Further inquiries about either this document or ongoing work on sustainable development and climatechange should be directed to: Shardul Agrawala of the OECD Environment Directorate:[email protected], or Georg Caspary of the OECD Development Co-operation Directorate:[email protected].

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TABLE OF CONTENTS

FOREWORD.................................................................................................................................................. 3

EXECUTIVE SUMMARY ............................................................................................................................ 6

LIST OF ACCRONYMS................................................................................................................................ 8

1. Introduction ...................................................................................................................................... 9 2. Country background......................................................................................................................... 9 3. Climate change: trends, scenarios, and key vulnerabilities............................................................ 12

3.1 Climate trends........................................................................................................................... 13 3.2 Climate projections ................................................................................................................... 14 3.3 Ranking of impacts and vulnerabilities..................................................................................... 16

4. Attention to climate concerns in national planning........................................................................ 18 4.1 General overview of development planning in Nepal .............................................................. 18 4.2 Attention to climate concerns in planning documents.............................................................. 19 4.3 Attention to climate concerns in environment focused plans and reports................................. 21

5. Attention to climate concerns in donor activities ........................................................................... 22 5.1 Donor activities affected by climate risks................................................................................. 23 5.2 Attention to climate risks in donor strategies............................................................................ 27

6. Climate change, glacial lakes and hydropower .............................................................................. 28 6.1 Glacial Lake Outburst Flooding (GLOFs)................................................................................ 29 6.2 Variability of river runoff ......................................................................................................... 32

7. Analysis of adaptation options for GLOF risks and streamflow variability................................... 33 7.1 Siting in non-threatened locations ............................................................................................ 33 7.2 Smaller hydropower plants ....................................................................................................... 34 7.3 Reduction in GLOF risks.......................................................................................................... 35 7.4 Incorporation of future reduced generation capacity in design................................................. 37 7.5 Integrated water resource and disaster management................................................................. 37 7.6 Energy supply and demand management.................................................................................. 38

8. Towards prioritization of climate responses in the hydropower sector.......................................... 39 8.1 GLOF hazards........................................................................................................................... 40 8.2 Hydropower .............................................................................................................................. 40 8.3 Social systems........................................................................................................................... 41

9. Conclusions and further issues....................................................................................................... 42 9.1 Climate trends, scenarios and impacts...................................................................................... 42 9.2 Attention to climate change concerns in national planning...................................................... 42

9.3 Attention to climate change concerns in donor portfolios and projects.................................... 42 9.4 Climate change: water resources and hydropower ................................................................... 43 9.5 Towards mainstreaming climate concerns in development planning: constraints andopportunities .......................................................................................................................................... 43

REFERENCES ............................................................................................................................................. 45

ANNEX. SOURCES FOR DEVELOPMENT PLANS AND PROJECTS............................................ 48

APPENDIX A............................................................................................................................................... 51

APPENDIX B............................................................................................................................................... 55

APPENDIX C............................................................................................................................................... 57

APPENDIX D............................................................................................................................................... 58

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Boxes

Box 1. A brief description of MAGICC/SCENGEN............................................................................ 15 Box 2. Creditor Reporting System (CRS) Database ................................................................................ 24

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EXECUTIVE SUMMARY

This report presents the integrated case study for Nepal carried out under an OECD project onDevelopment and Climate Change. The report is structured around a three-tier framework. First, recentclimate trends and climate change scenarios for Nepal are assessed, and key sectoral impacts are identifiedand ranked along multiple indicators to establish priorities for adaptation. Second, donor portfolios inNepal are analyzed to examine the proportion of donor activities affected by climate risks. A desk analysisof donor strategies and project documents as well as national plans is conducted to assess the degree ofattention to climate change concerns in development planning and assistance. Third, an in-depth analysis isconducted for Nepal’s water resources sector which was identified as most vulnerable to climate change.This part of the analysis also involved stakeholder consultation through an in-country workshop to identifykey synergies and conflicts between climate change concerns and sectoral projects and plans.

Analysis of recent climatic trends reveals a significant warming trend in recent decades which hasbeen even more pronounced at higher altitudes. Climate change scenarios for Nepal across multiple generalcirculation models meanwhile show considerable convergence on continued warming, with countryaveraged mean temperature increases of 1.2°C and 3°C projected by 2050 and 2100. Warming trends havealready had significant impacts in the Nepal Himalayas – most significantly in terms of glacier retreat andsignificant increases in the size and volume of glacial lakes, making them more prone to Glacial LakeOutburst Flooding (GLOF). Continued glacier retreat can also reduce dry season flows fed by glacier melt,

while there is moderate confidence across climate models that the monsoon might intensify under climatechange. This contributes to enhanced variability of river flows. A subjective ranking of key impacts andvulnerabilities in Nepal identifies water resources and hydropower as being of the highest priority in termsof certainty, urgency, and severity of impact, as well as the importance of the resource being affected.

Nepal receives between 350-400 million dollars of Official Development Assistance (ODA) annually.Analysis of donor portfolios in Nepal using the OECD-World Bank Creditor Reporting System (CRS)database reveals that between 50-65% of development assistance (by aid amount) or 26-33% of donorprojects (by number) are in sectors potentially affected by climate risks. However, these numbers are onlyindicative at best, given that any classification based on sectors suffers from over-simplification – thereader is referred to the main report for a more nuanced interpretation. Donor and government documentsgenerally do not mention climate change explicitly, although some risks are being taken into account –

albeit in a narrow engineering sense – as part of some development activities in Nepal.

The in-depth analysis of water resources in Nepal identifies two critical impacts of climate change –GLOFs and variability of river runoff – both of which pose significant impacts not only on hydropower,but also on rural livelihoods and agriculture. A preliminary discussion on prioritization of adaptationresponses highlights potential for both synergies and conflict with development priorities. Micro-hydro,for example, serves multiple rural development objectives, and could also help diversify GLOF hazards.On the other hand, storage hydro might conflict with development and environmental objectives, but mightbe a potential adaptation response to increased variability in stream-flow and reduced dry season flowswhich are anticipated under climate change. Further, while addressing one impact of climate change (lowflow), dams could potentially exacerbate vulnerability to another potential impact (GLOFs), as the breachof a dam following a GLOF might result in a second flooding event. Finally, the in-depth analysis also

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LIST OF ACCRONYMS

ADBCASCOPCRSDANIDADFID

DHMEIAESCAPGCMGDPGEFGHGGLOFHMGICIMODIPCCJICA

MOPEMTEFNARMSAPNEANPCNSSDSDANSEAUNUNCBDUNCCDUNDPUNEPUNFCCCUSAIDUSCSPWSSDVDC

Asian Development BankWorld Bank Country Assistance StrategyConference of the PartiesCreditor Reporting System of the OECD /World BankDanish International Development AssistanceDepartment for International Development

Department of Hydrology and MeteorologyEnvironmental Impact AnalysisUnited Nations Economic and Social Commission for Asia and the PacificGeneral Circulation ModelGross Domestic ProductGlobal Environment FacilityGreenhouse GasGlacial Lake Outburst FloodHis Majesty’s Government of NepalInternational Center for Integrated Mountain DevelopmentIntergovernmental Panel on Climate ChangeJapan International Cooperation Agency

Ministry of Population and EnvironmentMedium Term Expenditure FrameworkNatural Resource Management Sector Assistance ProgrammeNational Electricity AuthorityNational Planning CommitteeNational Strategy for Sustainable DevelopmentSustainable Development Agenda for NepalSectoral Environment AssessmentUnited NationsUnited Nations Convention on BiodiversityUnited Nations Convention to combat DesertificationUnited Nations Development ProgrammeUnited Nations Environment ProgrammeUnited Nations Framework Convention on Climate ChangeThe United States Agency for International DevelopmentUnited States Country Studies ProgramWorld Summit on Sustainable DevelopmentVillage Development Committee

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1. Introduction

This report presents the integrated case study for Nepal for the OECD Development and ClimateChange Project, an activity jointly overseen by the Working Party on Global and Structural Policies(WPGSP), and the Network on Environment and Development Co-operation. The overall objective of theproject is to provide guidance on how to mainstream responses to climate change within economicdevelopment planning and assistance policies, with natural resource management as an overarching theme.The Nepal case study was conducted in parallel with six other country case studies in Latin America,Africa, and Asia and the South Pacific region.

Each case study is based upon a three-tiered framework for analysis (Agrawala and Berg 2002):

1. Review of climate trends and scenarios at the country level based upon an examination of

results from seventeen recent general circulation models, as well as empirical observationsand results published as part of national communications, country studies, and scientificliterature. These projections are then used in conjunction with knowledge of socio-economicand sectoral variables to rank key sectoral and regional impacts on the basis of a number ofparameters. The goal of this tier is to present a framework to establish priorities foradaptation.

2. Review of economic, environmental, and social plans and projects of both the governmentand international donors that bear upon the sectors and regions identified as beingparticularly vulnerable to climate change. The purpose of this analysis is to assess the degreeof exposure of current development activities and projects to climate risks, as well as thedegree of current attention by the government and donors to incorporating such risks in their

planning.

3. In-depth analyses at a thematic, sectoral, regional or project level on how to incorporateclimate responses within economic development plans and projects, again with a particularfocus on natural resource management. In the case of Nepal this in-depth research wasconducted in close consultation with government officials, experts and in-country donorrepresentatives. Subsequent to the scoping research a consultative workshop was organized

jointly with the Department of Hydrology and Metereology in Kathmandu on March 5-6,20031. The workshop was attended by the Minister of Water Resources, representatives fromthe National Planning Commission as well as relevant government agencies, academia,donors, NGOs, and the media. As part of this workshop the participants collectivelyidentified principal climate change impacts and vulnerabilities, and used the AdaptationDecision Matrix to rank adaptation responses along several criteria including effectiveness,cost, as well as synergies or conflicts with other environmental or development priorities.

2. Country background

Nepal is a land-locked country located in South Asia between India and China. It contains 8 of the 10highest mountain peaks in the world, including Mount Everest (at 8848 m), although some of its low lyingareas are only about 80 m meters above sea level (Figure 1). There is therefore extreme spatial climatevariation in Nepal – from a tropical to artic climate within a span of only about 200 kilometers (the size of

1 Consultative Workshop on Climate Change Impacts and Adaptation Options in Nepal’s Hydropower Sector with a focus on Hydrological Regime, Kathmandu,March 5-6 2003 (Appendix A).

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an average grid box in a climate model). Nepal is divided into five geographic regions: Terai plan, Siwalikhills, Middle Mountains, High Mountains (consisting of the Main Himalayas and the Inner HimalayanValleys), and the High Himalayas (Table 1).

Figure 1. Geographical location and topography of Nepal

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particular might encourage settlements in regions that are most vulnerable to flooding from extremeprecipitation or glacial lake outbursts.

Nepal’s electricity infrastructure is heavily reliant on hydroelectric power: nearly 91% of the nation’spower comes from this source. Hydroelectric plants are highly dependent on predictable runoff patterns.Therefore, increased climate variability, which can affect frequency and intensity of flooding and droughts,could affect Nepal severely. Also, according to the World Bank (2002), there were only three personalcomputers and 11 telephone main lines per 1,000 people in Nepal in 2000, lower than the average forcountries of similar income. Nepal has a literacy rate of 58% (World Bank, 2002), suggesting relativelylow levels of education and limited technical capabilities. A gross secondary school enrolment rate of 47%compares favorably with other low income countries. However, gross tertiary enrolment of only 3% is wellbelow low income country averages. And, of this 3%, only 13% study sciences and engineering (WorldBank, 2002). These figures suggest a relatively limited technical capacity which might make it difficult forNepal to design and implement measures to adapt effectively to climate change. Figure 2 provides anindication of how Nepal compares to other low income countries in terms of four key indices of

development.

Figure 2. Development diamond for Nepal

Nepal

Low-incom e group

Development diamond

Life expectancy

Acc ess to improved water source

GNIpercapita

Grossprimary

enrollment

Source: World Bank, 2002

3. Climate change: trends, scenarios, and key vulnerabilities

The climate in Nepal varies from the tropical to the arctic within the 200 km span from south to north.Much of Nepal falls within the monsoon region, with regional climate variations largely being a functionof elevation. National mean temperatures hover around 15 °C, and increase from north to south with theexception of mountain valleys. Average rainfall is 1,500 mm, with rainfall increasing from west to east.The northwest corner has the least rainfall, situated as it is in the rain shadow of the Himalayas. Rainfallalso varies by altitude; areas over 3,000 m experience a lot of drizzle, while heavy downpours are commonbelow 2,000 m (USCSP 1997). Although annual rainfall is abundant, its distribution is of great concern:flooding is frequent in the monsoon season during the summer, while droughts are not uncommon incertain regions in other parts of the year.

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Figure 4. Temperature increase (per decade) as a function of elevation on the Tibetan Plateau(Liu and Chen 2000)

There are no definitive trends in aggregate precipitation, although there is some evidence of moreintense precipitation events. A somewhat clearer picture emerges in stream flow patterns in certain riverswhere there has been an increase in the number of flood days. Some rivers are also exhibiting a trendtowards a reduction in dependable flows in the dry season, which has implications both for water supplyand energy generation (Shakya 2003). Glacier retreat also contributes significantly to streamflowvariability in the spring and summer, while glacial lake outbursts which are becoming more likely withrising temperatures, are an additional source of flooding risk.

3.2 Climate projections

Changes in area averaged temperature and precipitation over Nepal were assessed based upon over adozen recent general circulation models (GCMs) using a new version of MAGICC/SCENGEN (Wigleyand McGinnis, draft). MAGICC/SCENGEN is briefly described in Box 1. First, results for Nepal from 17GCMs developed since 1995 were examined. Next, 7 of the 17 models which best simulate current climateover Nepal were selected. The models were run with the IPCC B2 SRES scenario (Nakicenovic and Swart2000)3. The spread in temperature and precipitation projections of these 7 GCMs for various years in thefuture provides an estimate of the degree of agreement across various models for particular projections.More consistent projections across various models will tend to have lower scores for the standard deviationrelative to the mean.

3 The B2 scenario assumes a world of moderate population growth and intermediate level of economic development and technological change. SCENGEN estimates a

mean global temperature increase of 0.8 °C by 2030, 1.2 °C by 2050, and 2 °C by 2100 for the B2 scenario.

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Box 1. A brief description of MAGICC/SCENGEN

MAGICC/SCENGEN is a coupled gas-cycle/climate model (MAGICC) that drives a spatial climate-changescenario generator (SCENGEN). MAGICC is a Simple Climate Model that computes the mean global surface airtemperature and sea-level rise for particular emissions scenarios for greenhouse gases and sulphur dioxide (Raper etal., 1996). MAGICC has been the primary model used by IPCC to produce projections of future global-meantemperature and sea level rise (see Houghton et al., 2001). SCENGEN is a database that contains the results of alarge number of GCM experiments. SCENGEN constructs a range of geographically-explicit climate change scenariosfor the world by exploiting the results from MAGICC and a set of GCM experiments, and combining these withobserved global and regional climate data sets. SCENGEN uses the scaling method of Santer et al. (1990) to producespatial pattern of change from an extensive data base of atmosphere ocean GCM – AOGCM (atmosphere oceangeneral circulation models) data. Spatial patterns are “normalized” and expressed as changes per 1°C change inglobal-mean temperature. The greenhouse-gas and aerosol components are appropriately weighted, added, andscaled up to the actual global-mean temperature. The user can select from a number of different AOGCMs for thegreenhouse-gas component. For the aerosol component there is currently only a single set of model results. Thisapproach assumes that regional patterns of climate change will be consistent at varying levels of atmosphericgreenhouse gas concentrations. The MAGICC component employs IPCC Third Assessment Report (TAR) science(Houghton et al., 2001). The SCENGEN component allows users to investigate only changes in the mean climate statein response to external forcing. It relies mainly on climate models run in the latter half of the 1990s.

Source: National Communications Support Program Workbook

The results of the MAGICC/SCENGEN analysis for Nepal are shown in Table 2. There is asignificant and consistent increase in temperatures projected for Nepal for the years 2030, 2050 and 2100across the various climate models. Increases in temperatures are somewhat larger for the winter monthsthan the summer months. Climate models also project an overall increase in annual precipitation. However,

given the high standard deviation the results for annual precipitation should be interpreted with caution.Even more speculative is the slight increase in winter precipitation. The signal however is somewhat morepronounced for the increase in precipitation during the summer monsoon months (June, July and August).This is because models estimate that air over land will warm more than air over oceans, leading to anamplification of the summer low pressure system that is responsible for the monsoon. These results arebroadly consistent, though more pronounced than the Country Study for Nepal that was based on outputsfrom four older generation GCMs, only two of which simulated the summer monsoon and itsintensification under the carbon dioxide doubling (Yogacharya and Shreshtha 1997).

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Table 2. GCM estimates of temperature and precipitation changes for Nepal

Temperature change (°C)mean (standard deviation)

Precipitation change (%)mean (standard deviation)

Year Annual DJF 4 JJA 5 Annual DJF JJA Baselineaverage 1433 mm 73 mm 894 mm 2030 1.2 (0.27) 1.3 (0.40) 1.1 (0.20) 5.0 (3.85) 0.8 (9.95) 9.1 (7.11)2050 1.7 (0.39) 1.8 (0.58) 1.6 (0.29) 7.3 (5.56) 1.2 (14.37) 13.1 (10.28)2100 3.0 (0.67) 3.2 (1.00) 2.9 (0.51) 12.6 (9.67) 2.1 (25.02) 22.9 (17.89)

Thus based on this analysis there is reasonably high confidence that the warming trend alreadyobserved in recent decades will continue through the 21 st century. There is also moderate confidence thatthe summer monsoon might intensify, thereby increasing the risk of flooding and landslides.

3.3 Ranking of impacts and vulnerabilities

The necessity of suitable responses to climate change not only relies on the degree of certaintyassociated with projections of various climate parameters (discussed in the previous section), but also inthe significance of any resulting impacts from these changes on natural and social systems. Further,development planners often require a ranking of impacts, as opposed to a catalog that is typical in manyclimate assessments, in order to make decisions with regard to how much they should invest in planning ormainstreaming particular response measures. Towards this goal, this section provides a subjective but

reasonably transparent ranking of climate change impacts and vulnerabilities for particular sectors inNepal.

Vulnerability is a subjective concept that includes three dimensions: exposure, sensitivity, andadaptive capacity of the affected system (Smit et al. 2001). The sensitivity and adaptive capacity of theaffected system in particular depend on a range of socio-economic characteristics of the system. Severalmeasures of social well-being such as income and income inequality, nutritional status, access to lifelinessuch as insurance and social security, and so on can affect baseline vulnerability to a range of climaticrisks. Other factors meanwhile might be risk specific – for example proportion of rainfed (as opposed toirrigated) agriculture might only be relevant for assessing vulnerability to drought. There are no universallyaccepted, objective means for “measuring” vulnerability. This section instead subjectively ranksbiophysical vulnerability based on the following dimensions 6:

• Certainty of impact . This factor uses our knowledge of climate change to assess the likelihood ofimpacts. Temperatures and sea levels are highly likely to rise and some impacts can be projectedbased on this. Changes in regional precipitation are less certain. We use theMAGICC/SCENGEN outputs to address relative certainty about changes in direction of meanprecipitation. Changes in climate variability are uncertain. The Intergovernmental Panel on

4 December, January, February

5 June, July, August

6 A comprehensive vulnerability assessment would have necessitated collection/aggregation of a range of socio-economic variables at a sub-national scale,and was beyond the scope of this desk analysis.

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resources to agriculture, and the significance of hydropower to the nations electricity supply (a 92% share)further justify the high ranking for water resources and hydropower.

The impacts of climate change on other sectors tend to be less direct and/or less immediate, and muchmore speculative – even though the sectors themselves are quite significant. Three sectors that fall in thiscluster are agriculture, human health, and ecosystems/biodiversity. Agriculture is very important for thecountry because a large portion of its output and labor force are devoted to it. From the limited informationavailable, it appears to have moderate sensitivity to climate change. Our judgment is that significantimpacts may not be seen for many decades unless there are substantial flood impacts. The direct impacts ofclimate change on agriculture seem relatively low.

Human health is ranked below water resources and agriculture mainly because of the significantuncertainty about many impacts, although it is likely that climate change will present health risks to Nepalfrom increased exposure to floods and vector-borne illnesses. We do not know how significant the healtheffects could be. The health related effects of flooding could be apparent in the near term, but other health

effects may not become apparent for many decades.

Finally, ecosystems/biodiversity are ranked last because little historical research has been conductedon the effects of species diversity. Nepal is not a center of endemism, yet its vegetation diversity makesbiodiversity an important issue. We are uncertain how sensitive biodiversity will be to climate change orwhen impacts may be realized.

4. Attention to climate concerns in national planning

From a collection of small, independent states, Nepal was transformed into a monarchy in 1743 whenthe King of the principality of Gorkha, in resistance of incorporation into the British Empire, united allNepalese territories under one flag (Shrestha 1998). In 1959, the first national general elections were held.

However, the parliament was dissolved by royal decree the next year, and the monarchy’s absolute powerwas not ended until 1990 when the multiparty system was instituted. Within the multiparty system, theroyal family still maintains substantial influence in Nepal. In recent years Nepal has been in the midst of aMaoist insurgency which has severely hampered government activity and daily life during the past severalyears by calling for strikes. The last elections were scheduled for 13 November 2002, but were postponedindefinitely until the security situation stabilizes. This political instability dampened the tourism industry,which saw a precipitous decline, in addition to discouraging potential investors. Prospects for stabilityhave improved significantly since the government and Maoists declared a ceasefire on 29 January 2003.

4.1 General overview of development planning in Nepal

Development planning in Nepal is under the responsibility of the National Planning Commission

(NPC). The NPC releases annual plans and assesses resource needs, in addition to formulating 5-year plansfor the country’s general development strategy. Several other agencies are also involved with development,including the Ministry of Finance (MOF), which is responsible for mobilizing and coordinating foreignaid. Nepal is divided into five regional development regions: Eastern; Central; Western; Mid-Western; andFar Western.

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The current concept paper for the Tenth Plan acknowledges the important influence weather can haveon overall economic performance:“The 10th Plan is being prepared and will be launched in a very difficulttime/ GDP is projected to increase only by 2.5 percent in FY 2001/02, which is also the base year for the

10th Plan. The lower growth rate projection is mainly due to lower agricultural growth caused by badweather conditions 8, domestic disturbances and lower external demand following the events of September11.”

At the same time, this paragraph is the only place in the whole document where the developmentimpacts of weather and climate are mentioned. While many of the proposed development activities maywell reduce vulnerability to climate risks, explicit attention to these risks is lacking. Exploration of ways toreduce climate risks, or analysis of the risks themselves, is not included. The only activities dealing directlywith climate risks in the activities matrix attached to the Tenth Plan are a couple of emergencymanagement items in the urban development section (construction of emergency shelters and provision ofhousing for disaster-affected families). The overall Medium-Term Expenditure Framework (MTEF) doesnot discuss climate risks either. By itself, this lack of specific climate risk management items is no reason

for concern. Ideally, climate risk management would be mainstreamed in many of the sectoral activities inthe MTEF and the activities matrix (such as hydropower development and agriculture projects). However,effective mainstreaming requires explicit attention at the policy level. Such attention is not reflected in theTenth Plan.

An analysis of the sectoral MTEF papers for some of Nepal’s vulnerable sectors underlines theimpression that climate change is ignored, and climate risks in general tend to be neglected in the country’sdevelopment policy. For instance, the MTEF paper for the power sector does not recognize risks tohydropower plants due to the variability in runoff, floods (including GLOFS), and sedimentation. TheMTEF paper for the health sector contains targets for vector-borne disease control and emergencypreparedness and disaster management, but does not explicitly discuss natural hazards and climate risks.The MTEF paper for the road sector does not discuss flood and landslide risks, nor does the MTEF paper

for water supply and sanitation discuss variability in rainfall, which may strongly affect the success ofmeasures in this sector 9. Similarly, the MTEF paper for the irrigation sector does not explicitly mentionclimate risks. However, its list of outputs includes mitigation of floods and erosion in cultivated areas, andwater harvesting to provide year-round water supply for irrigation. Both measures would fit well in anadaptation strategy for Nepalese agriculture.

The MTEF paper for the agriculture sector pays some attention to climate-related risks. For instance,it mentions the criticality of the monsoon season for the sector. On the other hand, it lists the country’s“agro-climatic potential ” as an opportunity. Moreover, a review of previous activities showed thatoutreach had been ineffective, mainly because it had been characterized by a top-down approach and a lackof orientation on small farmers’ problems, namely “ rain-fed and poor soils ”. Implicitly, this diagnosisidentifies climate conditions as one of the challenges that poor farmers face, and that are currently lackingattention. The proposed solution “ major research funds to be used in need-based adaptive research ” seemsunfocused, possibly a reflection of a lack of sufficient information on the importance of climate risks in theagriculture sector, and of a lack of awareness of options to reduce such risks. The document also proposesvarious other investments to improve the functioning of the agriculture sector that are likely to reducevulnerability to climate-related risks.

8 Anomalous weather, however, need not be linked to climate change.

9 The MTEF does propose simple solutions for sites where adequate and perennial water sources are lacking, including water-harvesting schemes and solar pumps.However, the real climate-related risks (what is “adequate” and how do you deal with a water source that is usually perennial but dries up during a period of drought)

are not discussed.

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4.3 Attention to climate concerns in environment focused plans and reports

Nepal has ratified the three Rio Conventions: the Framework Convention on Climate Change

(UNFCCC), the Convention to Combat Desertification (UNCCD), and the Convention on Biodiversity(UNCBD). All conventions oblige their signatories to follow a stipulated reporting system.

Nepal’s First Communication to the UNFCCC is currently in its final stages and expected to besubmitted sometime in 2003, and is therefore not available for review. Nepal’s most recent national reportto the UNCD was prepared for the Fourth Conference of the Parties (COP-4) to the UNCD in 2000. Thereport does point to the need for integration of responses to the UNFCCC and UNCD, but few concretesteps are outlined. However, a number of desertification specific responses outlined in the report, forexample, integrated watershed management, and community-based soil and water management are in factno-regrets (or low regrets) measures for adaptation to climate risks.

With regard to the Convention on Biodiversity, Nepal’s Biodiversity Strategy (2002) was prepared

under the UNDP/GEF Biodiversity Conservation Project. It lists several climate related risks, includingflooding and siltation, as threats to biodiversity conservation. However, the possibility that some of theserisks [including both flooding and siltation] could be enhanced significantly under climate change is notdiscussed explicitly.

Nepal’s Country Profile for the WSSD (2002) 10 discusses climate change only in the context ofmitigation of greenhouse gas emissions; adaptation to climate change is not mentioned. However, thesection on sustainable mountain development pays attention to indigenous systems of human adaptation tochallenging geographic and climatic circumstances in mountainous areas. Furthermore, many elements ofthe proposed sustainable development policies (designed for current climatic circumstances) would also beno-regrets measures for adaptation to climate change.

Nepal’s National Assessment Report for the World Summit on Sustainable Development (2002)recognizes the links between climatic circumstances and land degradation, erosion and landslides: “ in anutshell, ‘too much water’ and ‘too little water’ is responsible for land degradation in different land usesin Nepal .” It also recognizes the increase in landslide risks due to the effects of paddy cultivation andlivestock grazing in the hills and mountains. However, the fact that climate change might increase thoserisks is not discussed, and adaptation to climate change is not mentioned anywhere. Curiously, the onlysubstantive discussion of risks due to climate change is featured in a paragraph on public awareness. Thedocument mentions that FM radio stations should be used for this purpose: “ it will be important to increaseawareness of the general public about the so far neglected messages (…) about emerging issues likeclimate change and its link with increased dangers from Glacial Lake Outburst Floods (GLOFs) and

possible changes in monsoon patterns”. The 2001 Economic Commission for South Asia and the pacific(ESCAP) Nepal Country Paper (prepared for the Ministerial Conference on Infrastructure) meanwhile liststhe facilitation of a rapid response to natural emergencies (such as floods or earthquakes) as an importantrole of infrastructure. Nevertheless, it pays little attention to the risk of extreme weather to theinfrastructure itself, although it mentions that rural trails often become impassible during flooding. Sinceeven current risks are not addressed, future risks due to climate change are also missing.

Nepal also has a National Strategy for Sustainable Development (NSSD) under the name of theSustainable Development Agenda for Nepal (SDAN). The SDAN lists Nepal’s continuing vulnerability toclimate change, natural disasters and environmental degradation (in that order) among the constraints

10 These Country Profiles were published by the UN Commission on Sustainable Development on the occasion of the World Summit on Sustainable Development

(Johannesburg, 2002). They cover Agenda 21, as well as other issues that have been addressed by the CSD since 1997, and are based on information updated from

that contained in the national reports to the CSD, submitted annually by governments.

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facing Nepal’s Sustainable Development. It also contains a separate section on climate change, which liststhe potentially serious consequences for infrastructure, agriculture, drinking water, irrigation, hydropower,and biodiversity, and mentions the risk of GLOFs. Climate change is not mentioned as a risk in the context

of other sustainable development challenges, except in the case of biodiversity and natural disasters(increasing risk of GLOFs). Broader climate risks, including natural hazards such as floods and droughts,feature prominently, and concrete disaster mitigation measures are proposed (including the establishmentof a national disaster preparedness and management agency, the creation of village-level early warningsystems for floods, landslides or earthquakes, building decentralized emergency response capacity,enforcing design standards for buildings and infrastructure that take into account site-specific risks,investing in better weather and earthquake prediction systems, and, specifically for GLOFS, monitoring ofthe lakes and preparation of siphon materials). The discussion in SDAN therefore is consistent with thepriority ranking of critical climate impacts listed in Section 3.3 of this report.

The sectoral reports for the SDAN do not mention climate change explicitly, except for the one thatcontains a specific section on protection of the atmosphere. While this section recognizes the vulnerability

of Nepal and lists some expected impacts of global warming, it focuses primarily on mitigation and carbonsequestration. It recognizes the need to build capacity to minimize the adverse impacts of climate change,but offers no concrete measures. The report identifies a number of shortcomings in Nepal’s approach toclimate change: the delay of the National Communication to the UNFCCC, the lack of attention in nationalpolicy documents, the very low awareness among policy makers and the general public, and the lowinstitutional capacity, also in international negotiations. In the context of climate change mitigation, thereport points out that while the potential for CDM projects seems limited, many programs on alternativeenergy are being implemented without explicit linkage to climate change issues.

5. Attention to climate concerns in donor activities

Nepal receives large amounts of donor aid, of the order of US$ 350 million per year, or about 7% of

GNI. The largest donors, in terms of overall investments, are Japan, the Asian Development Bank, and theWorld Bank (IDA). Figure 6 displays the distribution of this aid by development sector and by donor.Nepal receives large amounts of aid, both in absolute terms and in relation to GNI. Consequently, foreignaid also accounts for the lion share (70% 11) of development investments in the country. Hence, while theoverall development agenda is of course set by the government of Nepal, the donor agencies have quite astrong say in the strategic choices and ways of implementation of the vast majority of developmentinvestments. 12 The following sections highlight the possible extent of climate risks to developmentinvestments in Nepal, and examine to what extent current and future climate risks are factored in todevelopment strategies and plans. 13,14 Analysis of selected donor project and planning documents isprovided in Appendix C.

11 Donor review for 2002 Development Forum

12 A recent review of donor aid to Nepal, in the context of the preparations of the government’s tenth National Development Plan, painted a rather bleak picture of therelationship between the government and the donor community. One of the reasons was the skepticism among donors about the government’s performance and

ownership of development projects. As a result, donors have taken a rather active role in planning and implementing development activities, to the extent that the

national institutional capacity for development has eroded. At the sa me time, there has been a perception that donors have sometimes lost sight of local priorities and

even seemed more interested in the quantity of aid resources delivered than in their quality and sustainability.

13 Given the large quantity of strategies and projects, the analysis is limited to a selection. This selection was made in three ways (i) a direct request to all OECD DAC

members to submit documentation of relevant national and sectoral strategies, as well as individual projects (ii) a direct search for some of the most important

documents (including for instance Nepal’s national development plan/PRSP, submissions to the various UN conventions, country and sector strategies from

multilateral donors like the World Bank and the ADB, and some of the larger projects in climate-sensitive sectors), and (iii) a pragmatic search (by availability) for

further documentation that would be of interest to the analysis (mainly in development databases and on donors’ external websites). Hence, the analysis is not

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5.1 Donor activities affected by climate risks

The extent to which climate risks affect development activities in Nepal can be partially gauged by

examining the sectoral composition of the total aid portfolio. Development activities in water resources, aswell as sectors such as agriculture, and health could clearly be affected by climate change as well ascurrent climate variability. At the other end of the spectrum, development activities relating to education,gender equality, and governance reform are much less directly affected by climatic circumstances.

In principle, the sectoral selection should include all development activities that might be designeddifferently depending on whether or not climate risks are taken into account. Therefore, the label “affectedby climate risks” has two dimensions. It includes projects that are at risk themselves, such as an investmentthat could be destroyed by flooding. But it also includes projects that affect the vulnerability of othernatural or human systems. For instance, new roads might be fully weatherproof from an engineeringstandpoint (even for climatic conditions in the far future), but they might also trigger new settlements inhigh-risk areas, or it might have a negative effect on the resilience of the natural environment, thus

exposing the area to increased climate risks. These considerations should be taken into account in projectdesign and implementation. Hence, these projects are also affected by climate risks.

Figure 6. Development aid to Nepal (1998-2000)

Source: Sources: OECD, World Bank

comprehensive, and its conclusions are not necessarily valid for a wider array of development strategies and activities. Nevertheless, the authors feel confident that

this limited set allows an identification of some common patterns and questions that might be relevant for broader development planning.

14 The phrase “climate risk” or “climate-related risk” is used here for all risks that are related to climatic circumstances, including weather phenomena and climatevariability on various timescales. In the case of Nepal, these risks include the effects of seasonal climate anomalies (like a dry winter or heavy monsoon), extreme

weather events, floods and droughts, as well as trends therein due to climate change. “Current climate risks” refer to climate risks under current climatic conditions,

and “future climate risks” to climate risks under future climatic conditions, including climate change.

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Clearly, any screen for climate change risks that is based solely on sectors suffers fromoversimplification. In reality, there is a wide spectrum of exposure to climate risks even within particularsectors. For instance, rain-fed agriculture projects might be much more vulnerable than projects in areas

with reliable irrigation. At the same time, the irrigation systems themselves may also be at risk, furthercomplicating the picture. Similarly, most education projects would hardly be affected by climaticcircumstances, but school buildings in flood-prone might well be at risk. Without an in-depth examinationof risks to individual projects, it is impossible to capture such differences. Hence, the sectoral classificationonly provides a rough first sense about the share of development activities that might be affected byclimate risks.

To capture some of the uncertainty inherent in the sectoral classification, the share of developmentactivities affected by climate change was calculated in two ways, a rather broad selection, and a morerestrictive one. The first selection includes projects dealing with infectious diseases, water supply andsanitation, transport infrastructure, agriculture, forestry and fisheries, renewable energy and hydropower 15,tourism, urban and rural development, environmental protection, food security, and emergency

assistance.16

The second classification is more restricted.

First of all, it excludes projects related to transportand storage. In many countries, these projects make up a relatively large share of the developmentportfolio, simply due to the large size of individual investments (contrary to investments in softer sectorssuch as environment, education and health). At the same time, infrastructure projects are usually designedon the basis of detailed engineering studies, which should include attention at least to current climate risksto the project. 17 Moreover, the second selection excludes food aid and emergency assistance projects.Except for disaster mitigation components (generally a very minor portion of emergency aid), theseactivities are generally responsive and planned at short notice. The treatment of risks is thus very differentfrom well-planned projects intended to have long-term development benefits. Together, the first and thesecond selection give an indication of the range of the share of climate-affected development activities.

Box 2. Creditor Reporting System (CRS) Database

The Creditor Reporting System (CRS) comprises of data on individual aid activities on Official DevelopmentAssistance (ODA) and official aid (OA). The system has been in existence since 1967 and is sponsored and operated

jointly by the OECD and the World Bank. A subset of the CRS consists of individual grant and loan commitments (from6000 to 35000 transactions a year) submitted by DAC donors (23 members) on a regular basis. Reporters are asked tosupply (in their national currency), detailed financial information on the commitment to the developing country such as:terms of repayment (for loans), tying status and sector allocation. The secretariat converts the amounts of the projectsinto US dollars using the annual average exchange rates.

In addition to the above two selections, the share of emergency-related activities was also calculated.This category includes emergency response and disaster mitigation projects, as well as flood control. The

size of this selection gives an indication of the development efforts that are spent on dealing with naturalhazards, including, often prominently, climate and weather related disasters.

The implications of this classification should not be overstated. If an activity falls in the “ climate-affected ” basket, which does not mean that it would always need to be redesigned in the light of climate

15 Traditional power plants are not included. Despite their long lifetime, these facilities are so localized (contrary to, e.g., roads and other transport infrastructure) that

climate risks will generally be more limited. Due to the generally large investments involved in such plants, they could have a relatively large influence on the

sample, not in proportion with the level of risk involved.

16 A complete list of purpose codes is included in the box on the methodology of the sectoral selections.

17 Note however, that they often lack attention to trends in climate records, and do not take into account indirect risks of infrastructure projects on the vulnerability of

natural and human systems.

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change, or even that one would be able to quantify the extent of current and future climate risks. Instead,the only implication is that climate risks could well be a factor to consider among many other factors to betaken into account in the design of development activities. In some cases, this factor could be marginal. In

others, it may well be substantial. In any case, these activities would benefit from a consideration of theserisks in their design phase. Hence, one would expect to see some attention being paid to them in projectdocuments, and related sector strategies or parts of national development plans. Figures 7 and 8 show theresults of these selections, for the three years 1998, 1999, and 2000 18, using the OECD/World Bank CreditReporting System (CRS) database (Box 2).

Figure 7. Share of aid amounts committed to activities affected by climate risk and to emergency in Nepal(1998-2000)

Affected by climate risks(high estimate)

65%

35%

Affected by climate risks

(low estimate)

50%50%

Emergency Activities

99%

1%

18 The three-year sample is intended to even out year-to-year variability in donor commitments. At the time of writing, 2000 was the most recent year for which final

CRS data were available. Note that coverage of the CRS is not yet complete: coverage ratios were 83% in 1998, 90% in 1999, and 95% in 2000. Coverage ratios of

less than 100% mean that not all ODA/OA activities have been reported in the CRS. For example, data on technical co-operation are missing for Germany and

Portugal (except since 1999), and partly missing for France and Japan. Some aid extending agencies of the United States prior to 1999 do not report their activities

to the CRS. Greece, Luxembourg and New Zealand do not report to the CRS. Ireland has started to report in 2000. Data are complete on loans by the World Bank,

the regional banks (the Inter-American Development Bank, the Asian Development Bank, the African Development Bank) and the International Fund for

Agricultural Development. For the Commission of the European Communities, the data cover grant commitments by the European Development Fund, but are

missing for grants financed from the Commission budget and loans by the European Investment Bank (EIB). For the United Nations, the data cover the United

Nations Children's Fund (UNICEF) since 2000, and a significant proportion of aid activities of the United Nations Development Programme (UNDP) for 1999. No

data are yet available on aid extended through other United Nations agencies. Note also that total aid commitments in the CRS are not directly comparable to the

total ODA figures in Figure 5, which exclude most loans.

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Figure 8. Share (by number) committed to activities affected by climate risk and to emergency activities inNepal (1998-2000)


33%

67%


26%

74%

Emergency Activities

99%

1%

In monetary terms, between half and two-thirds of all development activities in Nepal could beaffected by climate change. By number, the shares are somewhat lower; between a quarter and half of theactivities would be affected. 19 Emergency projects make up about 1% of all activities. In addition toproviding insight in the sensitivity of development activities in Nepal as a whole, the classification alsogives a sense of the relative exposure of various donors 20. These results are listed in Table 4 and 5 (againfor the years 1998, 1999, and 2000). 21

19 Note that the number of activities gives a less straightforward indication than the dollar amounts. First of all, activities are listed in the CRS in each year when a

transfer of aid has occurred. Hence, when a donor disburses a particular project in three tranches, that project counts three times in the three-year sample. If the

financing for a similar three-year project is transferred entirely in the first year, it only counts once. Secondly, the CRS contains a lot of non-activities, including

items like “administrative costs of donors”. Moreover, some bilateral donors list individual consultant assignments as separate development activities. In most cases,

such transactions will fall outside of the “climate-affected” category. Hence, the share of climate-affected activities relative to the total number of activities (which is

diluted by these non-items) is lower. On the other hand, the shares by total amount tend to be dominated by structural investments (which tend to be more costly than

projects in sectors such as health, education, or environmental management).

20 Caveat: note that the CRS is not entirely complete; see footnote number 8*.

21 Note that in this selection, the role of large infrastructure projects is clearly visible. In Nepal, Japan tends to be a major donor in those sectors. Hence, it ranks much

higher in the tables by amount than by number, and is absent from the table (by amount) of affected activities according to selection method 2 (which excludes

transport and storage, as well as emergency projects).

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Table 4. The relative shares of activities in the CRS database (1998-2000, by total disbursed aid amounts), forthe top-five donors

Amounts of activities

Activities affected byclimate risks

(high estimate)


(low estimate)Emergency activities

Donor million$ % Donor million$ % Donor million$ % Donor million$ %

Total 959 100% Total 623 100% Total 476 100% Total 6 100%

Germany 195 20% Germany 173 28% Germany 166 35% Japan 5 89% AsDF 187 19% AsDF 119 19% AsDF 119 25% Switzerland 0.5 9% Japan 148 15% Japan 76 12% UK 67 14% UNDP 0.05 1% UK 89 9% UK 72 12% Denmark 49 10% Germany 0.04 1%

IDA 72 8% IDA 60 10%Netherlands 13 3% Belgium 0.03 1%

Table 5. The relative shares of activities in the CRS database (1998-2000, by total numbers of activities), for

the top-five donors

Numbers of activitiesActivities affected by

climate risks(high estimate)


(low estimate)Emergency activities

Donor umber % Donor Number % Donor umber % Donor Number %

Total 667 100% Total 217 100% Total 175 100% Total 9 100% Norway 118 18% UK 35 16% UK 27 15% Switzerland 3 33% UK 66 10% Norway 23 11% Norway 23 13% Japan 2 22% Germany 65 10% Germany 20 9% USA 15 9% Belgium 2 22% USA 51 8% Switzerl. 19 9% Germany 14 8% UNDP 1 11% Australia 45 7% Canada 16 7% Canada 14 8% Germany 1 11%

Given the high share of development activities in Nepal that could be affected by climate risks, onewould assume that these risks are reflected in development plans and a large share of developmentprojects. The following sections will examine to which extent this is the case.

5.2 Attention to climate risks in donor strategies

The limited explicit attention to climate risks that is apparent in Nepal’s own development strategiesis also reflected in many of the major donors’ strategies for the country, as can be seen in documents frommultilateral agencies like the World Bank, UNDP and IFAD, as well as bilateral donors such as DFID andUSAID. All of these strategies contain measures that will reduce Nepal’s vulnerability in various, oftenindirect, ways. However, explicit attention to climate risks is lacking, and some opportunities forvulnerability reduction may well be missed. This section focuses primarily on donor strategies.

Several of these documents however do implicitly acknowledge the potentially large impacts ofclimatic factors on the success or failure of development investments. For instance, the World Bank’sEconomic Update for the 2002 Nepal Development Forum mentions that good rainfall has been one of thefactors that contributed to the higher growth in the agriculture sector in recent years, putting climate on a

par with increased use of fertilizer, private sector entry in the supply of inputs, better educated farmers,

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crop diversification, growth of agricultural credit, and improved infrastructure and irrigation. In addition, arelatively poor performance in agriculture is expected in the current year “following the untimely rainfallin September 2002”. Nevertheless, when discussing priorities for the agriculture sector, the need to

improve the resilience of the agriculture sector against adverse climatic conditions is ignored. A similarpattern arises in the ADB’s Country Assistance Plan. Climate risks are also not explicitly mentioned inUSAID’s and DFID’s country strategies for Nepal. USAID’s Nepal Annual Report evaluates pastperformance and updates priorities for the coming years. The agency concentrates on hydropowerdevelopment, health, and governance of natural resources. While these sectors are clearly sensitive toclimate, the report contains no references to climate risks. Climate change is only mentioned in the contextof the mitigation potential of hydropower development. DFID’s Country Strategy Paper for Nepal (1998)presents a similar picture as the World Bank and ADB strategies: ample components that may wellcontribute to reducing Nepal’s vulnerability, but no explicit attention to climate risks.

UNDP’s Second Country Cooperation Framework (CCF 2002-2006) focuses on poverty reductionand sustainable development, but does not discuss the impacts of climate-related risks on those goals.

However, a few crosscutting themes, including disaster mitigation, will be addressed in all projects andprogrammes of the CCF. This would mean that climate risk reduction ought to be mainstreamed inUNDP’s activities in the coming years. No specific examples of such mainstreaming are offered in theCCF.

The IFAD Country Strategic Opportunities Paper (CSOP) addresses several aspects of vulnerability inthe hill and mountain areas of Nepal, but pays little explicit attention to current climate-related risks, andentirely neglects climate change. However, it does bring up an interesting dimension of climate-relatedvulnerability in Nepal, particularly in relation to the hill and mountain areas. These areas are very poor,remote, and lack physical and social infrastructure. They became even more isolated and marginalizedwhen they missed the “green revolution” because new agricultural technologies that helped to sparkagricultural growth in other parts of the country were not suited for rain-fed agriculture in difficult

mountain terrains and climates. In combination, these factors have contributed to a downward spiral ofpoverty and lack of empowerment, leading to a lack of benefits from investments at the national level, andthus to further poverty. Climate change could intensify such inequalities (but is not discussed in theCSOP).

An important point to note is that the lack of explicit mention of climate risks does not necessarilymean a lack of attention to climate change: several strategies mention the mitigation potential of Nepal’shydropower and forestry sector. No win-win options for combined adaptation and mitigation (for instanceby afforestation) are discussed. An even more important point is that several donors and the governmentare in fact actively engaged in projects to reduce the risk of GLOFs over the past decade, as discussed ingreater detail in the following section. Therefore, even if donors do not explicitly link GLOF risks toclimate change per se, they are in fact actively engaged in devising adaptation responses to one of the mostcritical climate change related hazards for Nepal. This also highlights the limitation of using mention of“climate change” in project documents as a proxy measure to assess the significance the government ordonors might attach to devising appropriate responses to some of the impacts associated with it.

6. Climate change, glacial lakes and hydropower

As alluded to in preceding sections, the most critical impacts of climate change in Nepal are related toits water resources and hydropower generation, stemming from glacier retreat, expansion of glacial lakes,and changes in seasonality and intensity of precipitation. These impacts include:

• Increased risk of Glacial Lake Outburst Flooding (GLOF)

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• Increased run-off variability (as a result of glacier retreat, more intense precipitation duringmonsoon, and potentially decreased rainfall in the dry season)

•

Increased sediment loading (and landslides) as a result of GLOFs, as well as intense rainfallevents

• Increased evaporation losses from reservoirs as a result of rising temperatures

Increased sedimentation is in part linked to GLOFs, and so responses to GLOFs will partially alleviatethis risk. Meanwhile, as regards evaporation losses due to rising temperatures, it is not yet clear howsignificant such losses might be relative to the volume of the reservoirs. Therefore, this discussion willfocus on the first two impacts – GLOFs and increased run-off variability.

6.1 Glacial Lake Outburst Flooding (GLOFs)

One of the most tangible manifestations of climate change is the fact that many glaciers are melting.The Third Assessment Report of the Intergovernmental Panel on Climate Change (IPCC) states that thereis a high measure of confidence that in the coming decades many glaciers will retreat and smaller glaciersmay disappear altogether. This has already been seen in the Alps, where a 1 OC increase in temperature hascaused glaciers to shrink 40% in mass and 50% in volume since 1850 (IPCC, 2001). Analysis of local andregional records of glacier fluctuations in the Hindu-Kush-Himalayan (HKH) region during the sameperiod shows that, while examples exist of both advance and retreat, the glaciers have mostly beenretreating (Chalise, 1992). Glacial lake outburst floods (GLOFs) were first observed in Iceland andidentified under the name jokulhlaup , Icelandic for “glacier leap”. Ives (1986:2) observes: “Thecatastrophic discharge of large volumes of water is characteristic of many mountain regions, and especiallyglaciated areas. Such discharges usually result from the collapse of unstable natural dams formed whenstream channels are blocked by rockfall, landslide, debris flow, or ice and snow avalanches. Another causeis the outburst of lakes dammed by glacier ice or by glacier moraines…Depending upon the availability ofloose material, the outbursts may be flood surges with a high sediment load, or actual debris flows.”Richardson and Reynolds (2000:31) further describe the phenomenon in the Himalayas: “As glaciersrecede in response to climatic warming, the number and volume of potentially hazardous moraine-dammedlakes in the Himalayas is increasing. These lakes develop behind unstable ice-cored moraines, and have thepotential to burst catastrophically, producing devastating Glacial Lake Outburst Floods (GLOFs).Discharge rates of 30,000 m 3s-1 and run-out distances in excess of 200 km have been recorded.”

Glacial lakes can be ice-dammed or moraine dammed. Moraine dams are rocks and soil that havebeen pushed into a wall by the glacier. When the glacier retreats and a lake forms at the glacier tongue, themoraine holds the water back. GLOFs can also occur from lakes that form beneath the glacier or lakes on aglacier. Many glacial lakes drain periodically when the water reaches a certain level. This can be through ahole in the ice-cored dam, and the opening will become larger and larger, until suddenly the drainageaccelerates to “flood” rate. In some locations, this is regulated with the seasons so that some lakes will self-drain once or several times each summer. With moraine-dammed lakes, when a GLOF occurs, too much ofthe moraine material will be washed away, so that the lake does not reform.

The most significant GLOF event in terms of recorded damages occurred in 1985. This GLOF causeda 10 to 15 meter high surge of water and debris to flood down the Bhote Koshi and Dudh Koshi Rivers for90 kilometers. At its peak, 2,000 m 3 /sec discharged, two to four times the magnitude of maximummonsoon flood levels. It destroyed the Namche Small Hydel Project, which was almost completed at thetime and cost approximately NPR 45 million. An earlier GLOF in 1977 was recorded at Dudh Koshi. Thisevent killed two or three people, destroyed bridges for 35 km downstream, and triggered many debrisflows. Construction materials for a hotel that were kept 10 m above the river were swept away. The

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Namche Hydel site sustained such damage that it was deemed unlikely to be salvageable for anyreconstruction of the plant. Severe erosion destroyed the weir and headrace canal where water would flowinto the plant. The flood plain was extensively widened. This damage was not the only damage that

occurred that day on 4 August 1985. Damage occurred all along the length of the Langmoche Khola-BhoteKoshi-Dudh Koshi for a total of 90 km (Ives, 1986), including: 14 bridges, including new suspensionbridges, were destroyed; at least 30 houses, likely the only property the families had; erosion, undercutting,and destabilization of long stretches of the main trail from the airstrip at Lukla to Mount Everest basecamp; Prices increased by an average of 50% for staple supplies when the trail reopened; Cultivatable landand forest destroyed; Four or five deaths, but it could have been much higher had it occurred during peaktrekking season; collapsed road sections, which the community repaired quickly, but it remained unsafeand caused accidents later.

A joint United Nations Environment Programme (UNEP) / International Center for IntegratedMountain Development (ICIMOD) inventory glaciers and glacial lakes in Nepal in 2001 found over 3,252glaciers, 2,323 glacial lakes, and 20 potential GLOF sites (Figure 9). While this only provides a picture of

static risk, site based monitoring of specific glacial lakes has shown evidence for increasing lake volumesover time (see Figure 10 for one of the most significant lakes Tsho Rolpa). This trend in increase in lakevolume correlates well with observed trends in high rates of temperature increase at high altitudes in theHimalayas, as previously discussed in Section 3.1. Taken together, the ensemble of evidence points to apotentially serious hazard that is closely tied to rising temperatures on account of climate change.

Figure 9. Glacial lakes and potential GLOF sites in Nepal

Source: ICMOD/UNEP 2002

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Figure 10. Increase in area of the Tsho Rolpa Glacial Lake 1957-1997

Source: Department of Hydrology and Meteorology, Nepal

Many experts acknowledge that there is most definitely a retreat in glaciers, and glacial lakes havebeen growing (see figure above). With regard to a lake outburst, there are many trigger mechanisms,including earthquakes, spontaneous breakage of the moraine dam, and events such as the collapse of alarge “hanging glacier” into the lake. However, climate change and higher temperatures are contributing toa very rapid increase in the volume of glacial lakes, which significantly increases the probability ofcatastrophic failure of lake walls as a result of these triggers. Richardson and Reynolds (2000) report thatice avalanches triggered more than half of all the recorded GLOFs in the Himalayas. Furthermore, all ofthe events occurred between the monsoon months of June and October when lake levels were at theirhighest. Therefore, increased intensity of monsoon precipitation which has been observed in recent years(and is consistent with climate change projections) could be an additional climate induced risk, in additionto rising temperatures that result in higher lake levels. Empirical evidence on the frequency of GLOFoutbreaks seems to support this. Richardson and Reynolds (2000:36) note: “Historical records compiled bythe authors of 33 Himalayan GLOFs indicate that the frequency of events appears to be increasing. It isalso known that many existing lakes are growing in size as glaciers retreat and their moraine dams degrade.The potential for larger and more frequent floods is undoubtedly increasing.”

The impact of the future GLOFs on hydropower will be proportional to the amount of water in thelake, slope of its path downstream, debris and sediment picked up, and proximity of the hydropower plant.In the high Himalaya, riverbanks are very steep and highly variable over short distances. It is likely that aGLOF would cause both vertical and lateral erosion. This would spark off further debris flows andlandslides. The loss of the Namche hydropower plant in 1985 did indeed serve as a catalyst for thegovernment and donors to begin to pay attention to GLOF risks in siting and construction decisions forhydropower facilities. For example, in developing the Arun-3 project funded by the World Bank, the threat

of a GLOF was brought to the attention of donors during the later stages of decision-making. Donors were

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sufficiently concerned about the risk of a GLOF that an urgent meeting was called in Paris. After muchdebate, an investigative study was commissioned for up to half a million dollars. However, the study wasnever initiated because the Arun-3 project collapsed due to environmental and local community concerns,

among varied other reasons.6.2 Variability of river runoff

Two factors will contribute to increased variability of river runoff: glacier retreat; and changes intiming and intensity of precipitation. Runoff will initially increase as glaciers melt, then later decrease asdeglaciation progresses. In addition, decreased winter snowfall means less precipitation would be stored onthe glaciers, so this would in turn decrease the spring and summer runoff. Studies on climate variability inSouthwest Asia show that decreased winter snowfall does indeed decrease the spring/summer runoff, and ithas caused severe droughts in Iran and Pakistan in areas that depend on water from mountain sources(Subbiah, 2001). Winter runoff, on the other hand, would increase due to earlier snowmelt and a greaterproportion of precipitation falling as rain.

As discussed above in the section on climate scenarios, precipitation projections show wettermonsoons (with moderate certainty) and drier low flow seasons (with lower certainty). Many of Nepal’srivers are fed by runoff from the over three thousand glaciers scattered throughout the country. Theserivers feed the irrigation systems, power grain mills and electricity plants, and supply drinking water forvillages for thousands of miles downstream. Some of the most prominent rivers in Nepal have averageannual flows of 1,500 m 3 /s, including the Koshi, Gandaki, and Karnali. The most severe projections forNepal show that runoff could reduce by 14%. This would reduce the electricity generation of existingplants. This runoff decrease will affect Nepal’s economically feasible hydropower potential; however, withonly 1-2% of that potential currently developed, it will be quite some time before opportunities to expandthe hydropower supply are constrained by climate change. This does not mean however that existing

facilities might not be seriously affected by a combination of variable flows, flooding risks, as well as

sedimentation brought down by intense rainfall of GLOF events.

Climate change has a number of implications for streamflow variability in Nepal. Shakya (2003)points out that 90% of debris volume in Nepal is transported by approximately 20% of rainfall. With theintense rainfall projected for the monsoon season, sedimentation is another factor that may shorten theoperating life of a hydropower plant. There has also been an observed increasing trend in the number offlooding days. On the other hand, there might be significant declines in the dependability of dry seasonflows in certain rivers, which is quite critical for both water and energy supply. For example, for theBagmati river, the long term 92.3% dependable flow, which is currently 21.1 m 3 /sec, is projected to declineto 9.86 m 3 /sec by 2030, and will be only 7.43 m 3 /sec under CO 2 doubling (Shakya 2003). On the otherhand, the intra-annual variability of stream flow is also projected to increase significantly. The currentrange of the Bagmati is 316.26 (from a low of 21.1 to a high 337.36). Under climate change this variabilityin flow will increase to 810.37 m 3 /sec (from a low of 7.43 to a high of 817.8) – posing considerably morecomplexity for hydropower planners and engineers in maintaining electricity generation throughout theyear.

While the numbers presented here are only illustrative, they do in fact point to changes in thecharacteristics in the level and variability of streamflow, as well as associated events such as flooding andprecipitation risks, that might require adequate incorporation in water resource and hydropower planning,

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particularly because all except one of Nepal’s existing hydropower facilities are of the “run of river” type,with no associated dams, which makes them more vulnerable to streamflow variability 22.

7. Analysis of adaptation options for GLOF risks and streamflow variabilityA number of adaptation strategies are in fact available to cope with both GLOF risks as well as

changes in streamflow variability. Some of these responses are already in varying stages of implementationwithin the context of development projects, although such responses tend to be more clustered on themapping and (engineering based) reduction of GLOF risks, and far less so in the direction reduction insocial vulnerability or to cope with enhanced streamflow variability.

7.1 Siting in non-threatened locations

This adaptation option reduces vulnerability of GLOF risks by moving proposed hydropower plants toalternative locations. This risk of a GLOF occurring is relevant to the construction of both small-scale

hydropower and large-scale. The former because they are often located in close proximity to potential sites.The latter because of the danger of damage, clogging, and much faster rates of siltation than designs cancope with (Ives, 1986). It is also a concern for roads and communications that usually accompany theconstruction of a hydropower plant. Other major infrastructure is also threatened. A 1981 GLOF wasestimated to have a peak discharge of 16,000 m 3 /sec at the source, and it closed the China-Nepal Highwayfor one year, destroyed the Friendship Bridge, and modified the river for 30 km downstream.

Documents from the Namche Project that was destroyed in the 1985 GLOF event do not giveevidence that any “special attention was paid to the possible occurrence of catastrophic geomorphic events,despite the fact that the project was being sited in one of the highest and most precipitous mountain regionsin the world” (Ives, 1986: 18). However, after the Namche disaster in 1985, the Austrian Governmentrelocated the plant and built it in another location. It has since been under continuous operation and the risk

of GLOF is estimated to be low. However, in relocating hydropower plants, there is the question ofwhether the generating capacity is lowered, or if transmission costs increase. With the potentially reducedgenerating capacity, is it still possible to promote industrial and commercial growth at a rapid enoughpace? Another concern is that, given the general uncertainty on GLOF risks at this time, investors andenergy planners may be reluctant to relocate plants when it is only one of many factors in choosing a site.In discussions with hydropower officials, they stressed that assessments are conducted for a wide variety ofrisks as a matter of course in developing plants, and GLOFs are being considered more and more.

However, one of the main barriers in effectively incorporation of GLOF risks in project siting isreliable spatial mapping of which lakes are at risk of bursting 23. This is not straightforward, however, sinceGLOFs can travel as far as 200 km or more. Catchment-wide analyses should be undertaken to determinethe vulnerability downstream of hazardous glacial lakes. Furthermore, secondary damming resulting fromthe initial GLOF can pose just as great a risk to hydropower plants by forming large reservoirs, which maythen burst themselves. In fact, the risk may be even greater, since the reservoirs are much closer to the

22 Although, conversely, the absence of dams makes such installations safer in the event of glacial lake outbursts, as there would not be a secondary flooding event as a

result of the breach of the dam. This also illustrates how suitable adaptation responses to one aspect of climate change impacts, might in fact exacerbate vulnerability

to another aspect.

23 The UNEP/ICIMOD inventory of glacial lakes in Nepal and Bhutan is a step in this direction, but other experts observe that the database draws upon somewhat

dated information.

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plant 24. An integrated risk management approach is therefore needed to supplement satellite based riskmapping of the lakes themselves.

7.2 Smaller hydropower plantsHydropower in Nepal is divided into five categories:

• Micro – up to 100 kW

• Small – 101 kW to 10 MW

• Medium – 10 MW to 35 MW

• Large – greater than 35 MW

One adaptation response to GLOF risks is to promote the development of smaller plants would alsospread the risk of a catastrophic flooding event and avoid damage to a huge plant with significant sunkcosts. Micro-hydropower has the potential to fulfil a large amount of the rural demand for energy. Waterwheels ( ghatta ) have already been used in Nepal for hundreds of years to process agricultural products.Nepal has 6,000 rivers and rivulets, with 25,000 traditional ghatta in use. Current micro-hydro plants rangefrom 1 to 56 kW, and there are currently 924 units in the country, totalling approximately 10 MW. Inaddition, there is now a move to privatize hydropower plants with less than 10 MW capacity. For small andmedium plants, the Ministry of Finance announced in the budget speech of 2001/02 that HMG willpromote private investment in them as a “priority sector”. This would encourage private development andincrease the skills base of entrepreneurs and workers. Less bureaucracy should also be beneficial to theeconomic standing of plants. At the moment, a license must be obtained for any hydropower plant greaterthan 1000 kW.

The development of micro- and small hydro is already in line with Nepal’s development priorities,and is being encouraged by both the government and donors. In other words, climate change might be oneadditional reason to promote a strategy that is already being implemented for reasons of economicdevelopment.

One issue is whether small hydropower or smaller scale plants would be sufficient to fuel industrialgrowth in Nepal. Further investigation is needed to determine this. On the other hand, one of Nepal’suppermost priorities is rural development, and small and micro-hydropower will play a much moreimportant role in that regard. Electricity development can help to diversify the economy, and at